Slide 1

TARIFF AND NONTARIFF BARRIERS TO TRADE

Slide 2

Tariffs

 Most important form of trade restriction employed by countries all over the world to protect
domestic industries.

Trade restrictions or barriers

 Import Quotas
 Voluntary Export Restraints
 Antidumping actions

Nontariff barriers work by

 Raising the prices of imports

 Limiting the quantities of imports

Protectionism

 A policy that is used to sustain domestic producers through artificial restrains on foreign
competition.

Slide 3

Tariff

 A tax levied on imports of goods.

 Import duty
 Usually levied by a country to raise revenues for the government.
 Main purpose is to reduce imports to protect domestic producers from foreign competition.

Imports

 Also being limited in a country through nontariff barrier such as the quota.

Quota

 A direct quantitative restriction on the amount of a commodity allowed to be imported or

exported.
Import Quota

 A limit on the quantity of good that is produced by foreign entity that can be imported.

Slide 4

Voluntary Export Restraints (VER)

 The case where an importing country induces another country to voluntarily reduce its exports
of a particular commodity under threat of higher all-round trade restrictions when these exports
compromise an entire domestic industry.
 A negotiation.

Dumping

 The export of a commodity at below cost or at least the sale of a commodity at a lower price
abroad then domestically.

Slide 5

Exchange Rate

 Expresses the currency of the nations in respect to foreign ones.